Canadian executive ‘paid kickbacks’ to win environmental work, prosecutor says as trial opens

31 January 2017 9:55am

22 February 2016. By Richard Vanderford.

John Bennett “paid kickbacks and defrauded the government” to win tens of millions of dollars in environmental contracts, a federal prosecutor said Monday, opening a trial in New Jersey against the extradited Canadian executive.

Bennett, the onetime CEO of Vancouver-based Bennett Environmental, paid more than $1 million in kickbacks to a project manager to win his company subcontracting work on a government-funded cleanup, Helen Christodoulou said in opening statements in federal court in Newark.

“He paid kickbacks and defrauded the government,” she said, describing Bennett as a “hands-on manager” who oversaw a scheme that ran from 2001 to 2004.

Bennett, 80, was extradited from his home in British Columbia to stand trial after a long court battle in Canada. He faces conspiracy and fraud charges.

Jurors heard two starkly contrasting accounts of his involvement in the scandal. In one, from prosecutors, Bennett was a driven boss who won his company more than $60 million in work by furnishing lavish gifts and cash payments on a corrupt employee of a prime contractor.

In another, from Bennett’s lawyers, he was a grandfather in semi-retirement who misplaced his trust in a crooked 20-something salesman that hatched a scheme to rip off the US government under his nose.

That salesman, Robert Griffiths, has already served two years in prison and is testifying against Bennett as part of a plea deal with prosecutors. Another executive at the company and Bennett Environmental have also pleaded guilty.

The charges center around a US Environmental Protection Agency Superfund site in Manville, New Jersey. Once home to a facility that treated railway ties with toxic creosote, a preservative, the site was developed into a residential neighborhood in the 1960s.

When creosote began seeping out of the ground in the 1990s, the EPA shepherded a cleanup program. Bennett Environmental won several subcontracts to clean soil from the site, in part by paying off an employee of the prime contractor, Sevenson Environmental Services, for looks at its competitors’ bids.

Bennett oversaw the scheme, Christodoulou said.

“He was the chief executive officer. He was the chairman of the board,” she told jurors. “He was the boss.”

About three-quarters of Bennett’s total business was contracts steeped in kickbacks and fraud, Christodoulou said.

A lawyer for Bennett argued that the government charged an “innocent” man by believing a story that Griffiths, an ambitious salesman that Bennett’s firm hired straight out of college, spun in a bid to win a plea deal.

“He’s a talented salesman and a salesman sells,” Richard Albert told jurors. “Ladies and gentleman, the question in this case will be: are you going to buy?”

Griffiths has already served a prison sentence after pleading guilty to a three-count indictment that included a count of obstruction of justice, a charge filed after he lied to Securities and Exchange Commission investigators to cover up the scheme.

He now lives in Kamloops, a small city in British Columbia, where he works as a heavy mechanic and truck driver after his conviction ended a career in the Canadian navy.

Albert repeatedly attacked his credibility, calling him “very talented” but “deeply flawed and dishonest.”

Bennett was one of the “world’s great optimists” who built his company from scratch but put too much faith in Griffiths and other staff, who paid kickbacks without his knowledge, Albert said.

“He was trusting of his executives and employees,” he said. “Too trusting.”

As the white-haired Bennett followed the arguments by watching a live transcript from a court reporter, Albert described him in kindly terms, as a grandfather of eight who made a life in Canada after emigrating from Wales.

He succeeded, inventing and patenting new environmental technology and founding an industry-wide environmental summit that continues in Canada, despite having what doctors now know to be dyslexia, Albert said.

That difficulty in reading and writing meant Bennett wasn’t fond of or good at e-mail, and didn’t see the kickback scheme despite some e-mails directly to him that might seem to describe it, he said.

Bennett had also made steps to distance himself from the day-to-day management of the company by the time the creosote project was underway, Albert said. A new president, Peter Richardson, had taken over, and the company’s headquarters moved from Vancouver to near Toronto, 2000 miles away, to be closer to North America’s original industrial heartland and the lucrative remediation work there.

Bennett and Richardson clashed over Richardson’s flashy, extravagant spending on partners, including those at Sevenson, Albert said.

Griffiths, who is expected to be a key witness for prosecutors, began testifying Monday, but only took the stand for about 15 minutes. Another former Bennett employee, Zul Tejpar, is also expected to testify for prosecutors as part of a plea deal.

The trial could last up to four weeks, US District Judge Susan Wigenton, who’s presiding over the case, said.

Gordon McDonald, the Sevenson employee who solicited the kickbacks, was sentenced to 14 years in prison in 2014 after a jury found him guilty of related charges.

Bennett is the first Canadian extradited to the US to face competition-related charges.

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